Pershing Square Capital Management, led by Bill Ackman, has lost $400 million or more by selling its entire Netflix holding on Wednesday, after only three months. Bloomberg estimates the damage to be roughly $435 million.
In late January, Ackman reported the purchase of around 3.1 million Netflix shares, establishing a 0.7 percent position in the streaming company and making Pershing Square one of its 20 largest shareholders.
We recently purchased more than 3.1m shares of @Netflix which makes us a top-20 holder. I have long admired Reed Hastings and the remarkable company he and his team have built. We are delighted that the market has presented us with this opportunity. https://t.co/BNx1EWUVGhPlease help us out :
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— Bill Ackman (@BillAckman) January 26, 2022
Netflix announced on Tuesday that it lost 200,000 customers in the first quarter, the streaming service’s first decline since 2011. The firm expects to lose another 2 million members in the current second quarter and has stated that revenue is not growing as quickly as it would like in the short term. Netflix’s stock immediately dropped 35%.
Netflix’s stock price rose at the start of the pandemic in 2020, as customers trapped at home increased their viewing habits. However, its prospects began to deteriorate as the world reopened, owing to increased competition from streaming providers such as Disney+ and HBO Max.
Netflix’s stock price peaked in November 2021 and is currently down roughly 62 percent year to date.